Jim Keeley, SIOR, CCIM, founding partner of Colliers International’s Scottsdale office, released his annual Greater Scottsdale Airpark 2030 Report for the year ending December 2016. The 2030 Report was first published in 1989 as the 2010 Report and provides a current and historical perspective on economic activity, growth and trends for the Greater Scottsdale Airpark (“Airpark”).
“This past year brought an overall fresh attitude to the Airpark that embraces innovation, live/work/play and the transition to a millennial workforce,” said Keeley. “The newly built ‘Sneaky Big Studios’ and the influx of technology companies are creating a dynamic, new energy to the area.”
One of the biggest changes in the Airpark was the city’s agreement to tear down the current airport terminal and renovate with two new hangars and an updated terminal. “This modernization of facilities will insure that the Scottsdale Airpark will remain a destination of choice for private and corporate aviation,” said Keeley.
The recession cycle allowed the City of Scottsdale time to implement other new transportation decisions, including roundabouts on Hayden Road and Raintree Road. These improvements will also solidify the future of the Airpark as a thriving business hub.
“This real estate cycle is quite different from those of the past 50 years,” said Keeley. “We have far less vacant space because of job growth, which has driven up the price of buildings. For the first time in Arizona’s economic history, this growth in employment was not driven by residential construction.” According to the Colliers International report, residential construction is expected to improve over the next several years, which will increase commercial and industrial property values even more.
“We have experienced very little construction in the past seven years and our inventory has been absorbed by schools, insurance companies, financial institutions, churches and other users. Significant absorption and low vacancy has driven up rental rates, which we anticipate continuing.”
The Airpark posted a year-end 2016 vacancy rate of just 10.3%, the lowest since 2006. Approximately 3,075 companies operate in the area, employing more than 56,000 people.
Approximately 38% of the commercial space in the Airpark is office buildings and another 27% is industrial/flex facilities.
“The Airpark continues to attract leading companies, either with their headquarters or subsidiaries,” said Keeley. “It has been reported that eight billionaires operate in the Greater Scottsdale Airpark.”
A number of sizable transactions took place in or near the Airpark during 2016. Optima Kierland, a 12-story, 220-unit residential project is actively under development. The 202-unit Sunset Commons apartment community is underway and residents will take occupancy in 2017. Additionally, Bahia Drive will be the future home of an exciting three-story live/work condo community called Soho. On the retail side, Potato Barn opened its new furniture showroom on the Loop 101 freeway. The office market received some very noteworthy deals in 2016. Scottsdale Quarter opened its new six-story office building and is expected to lease up quickly with the highest rents in the Airpark. YAM Holdings moved into a new 60,000-square-foot modern headquarters building. Van Trust Real Estate relocated its corporate headquarters from Phoenix to the Greater Airpark Perimeter Center.
According to the Colliers report, the Airpark can look forward to an exciting 2017. The Live/Work/Play evolution will come alive with more than 800 new apartment and condo owners taking up residence in the area. A group of Airpark stakeholders are looking to “brand” the Airpark employment base and the area is expected to attract more aerospace, defense and technology focused companies.